Lenders grant 1.6m mortgage payment holidays

One in seven homeowners facing financial difficulties due to COVID-19 have taken mortgage payment holidays.

Chancellor Rishi Sunak announced in March that mortgage borrowers would be entitled to three-month payment holidays.

Figures from UK Finance up to 24 April 2020 showed that 1.6 million repayments have been deferred, worth an average of £755 per mortgage.

More than a third of payment holidays were approved within the first week of lockdown measures being imposed on the UK.

Stephen Jones, chief executive at UK Finance, said:

"Lenders understand that many households are seeing their finances squeezed due to the coronavirus pandemic.

"The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to COVID-19 can opt for the security of fixing their monthly mortgage payments going forward.

"There is a range of support available to mortgage holders concerned about their finances."

In addition, mortgage holders on payment holidays or who have been placed on furlough can switch to a new deal at the end of their term.

Usually, people on payment holidays would not be able to transfer products.

But, given the exceptional circumstances, lenders have waived this rule to help struggling mortgage holders.